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Prices remain high as Malaysia chicken supply stabilises with export ban kicking in

KUALA LUMPUR - Chicken supply in Malaysia appears to be slowly stabilising following the export ban imposed by the government, but retail prices remain stubbornly high.

Chicken rice seller Farhana Junid said at the peak of the crisis last week, she only received 80 birds instead of 200 which were needed to run her shops in Johor Bahru.

"I've been getting 150 birds per day for the past few days - still short but at least it's something. We're now extending our business hours back to normal," she told The Straits Times.

"I had to close my shops early last week since I had nothing to sell. I lost about RM17,000 (in income) because of the shortage, but things look like they're slowly improving, although it's still too early to say," she added.

Malaysia is currently facing a chicken shortage, with Prime Minister Ismail Sabri Yaakob announcing on May 23 that it will halt the export of up to 3.6 million chickens a month from Wednesday (June 1), until domestic prices and production stabilise.

The government imposed a ceiling price of RM8.90 (S$2.80) per kg of chicken, under a price control scheme in force between Feb 5 and June 5.

Checks by ST found that although there was an adequate supply of raw chicken at supermarkets and wet markets in the Klang Valley, many sellers were selling it above the ceiling price, risking a fine of RM100,000 to RM1 million, or three to five years' jail, or both under the Price Control and Anti-Profiteering Act 2011.

Local media reported that some grocers are pricing chicken as high as RM17 a kg.

By Monday (May 30), the Domestic Trade and Consumer Affairs Ministry had issued compound fines totalling RM256,800 to sellers who flouted the controlled pricing.

Meat trader Ahmad Bakrin Razi said he has no choice but to hike his price of chicken up to RM11.70 to protect his livelihood.

"It's impossible to comply no matter how much we want to, because my suppliers are already charging me RM9 per kg of fresh chicken, it doesn't make sense for me to sell at RM8.90 as set by the government. Sellers like me also can't compete with supermarkets, we don't take the same amount of volume so our suppliers can't offer a lower price," he told ST.

"I'd be lying if I didn't feel scared of being caught but I don't have a choice," he said.

Malaysia has the capacity to produce chickens and eggs to almost self-sufficiency levels, but its dependence on imported feed - whose prices have surged in recent months and the weakening ringgit - has been the main factor leading to the current severe chicken shortage.

Commodities Minister Zuraida Kamaruddin said Russia's invasion of Ukraine and uncertain weather patterns have created a global shortage of chicken feed. Malaysia's chickens are eating less and growing slower than normal, which in turn restricts the supply of the birds.

Some poultry farmers have stopped production due to higher costs and other factors, while others have raised prices despite the government's price cap.

The government is also in discussions with industry players about diverting exports of waste from processing palm kernels for local use as animal feed.

The Rubber Industry Smallholders Development Authority's role has also been expanded to help the country's agrofood production by getting rubber planters to diversify into farming chickens.

Rural Development Minister Mahdzir Khalid said rubber farmers have also been incentivised to grow corn, to reduce Malaysia's dependence on import of animal feed.

A 15ha pilot project that began in February last year expected to produce 82 tonnes of corn for livestock feed this July, he said.

On Wednesday (June 1), Prime Minister Ismail Sabri Yaakob also announced that the government will cut subsidies given to chicken breeders, and direct financial aid to the lower income group instead come July 1, in a bid to ease the impact of the rising cost of goods.

Along with the price cap on chicken, the government is giving poultry farmers a subsidy of 60 sen per kg from Feb 5 to June 4. However, very few players applied for it.

Separately, the Perak state government drew flak from the public for urging the people to grow vegetables and rear livestock for their own consumption.

Chief Minister Saarani Mohamad said this could be among the initiatives taken to reduce the burden of rising cost of living due to the spike in the price of agricultural products and livestock meat such as chicken and mutton while the surplus could be sold.

Among the online brickbats in response, social media user Winson Teh said: "If food is scarce, we have to start rearing our own chickens. So if there's no construction worker, we need to build our own house? Is this some kind of a joke, then what is the function of the government?"

malaysiaCHICKENTRADE